Updated | 'Malta enjoys second lowest annual inflation rate' - government

The National Statistics Office (NSO) published an analysis of inflation rates for 2014, which shows that Malta had the second lowest annual inflation rate since NSO started its analyses around twenty years ago.  This rate amounts to 0.8%, and the only time Malta had a lower rate was in 2007, with 0.7%.

The government said that “Throughout the previous administration, the average annual inflation rate was of 2.8%. This rate is three times higher than the rates observed in 2014. In the previous administration’s last year in power inflation even went as high as 3.2% which is four times higher than the inflation registered in 2014.”

The government added that this was the second year in a row where inflation was kept at low levels. “In 2013 inflation rates were at a mere 1% which is three times lower than the inflation rate registered in the last year of the previous government.”

“The current government’s policies were the main reason why Malta had such low inflation rates in 2013 and 2014. During the last legislature the price index for water, electricity, gas and fuels were higher than 110.5 in 2007 to 146.8 in 2012, which means a 33% increase in prices. Under the new government the price index went down from 146.8 in 2012 to 138.8 fl-2014, or a price reduction of more than 5%” it said.

“Whereas the previous government burdened families with a three-time increase in utility prices, like electricity, water, gas and fuels, the current government reduced this burden by 5%” the government continued.

According to the government, a survey by the European Commission further proves this fact. “During the previous administration almost two-thirds of the respondents considered inflation as the worst problem for their family. This rate has now been halved.”

“The government will continue with its commitment to reduce problems for the families in Malta and Gozo. We are also committed to enact economic policies based on optimism for the people of our country.”

Euro area annual inflation was -0.2% in December 20142, down from 0.3% in November. This was the lowest rate recorded since September 2009. In December 2013 the rate was 0.8%. European Union annual inflation was -0.1% in December 2014, down from 0.3% in November. A year earlier the rate was 1.0%. These figures come from Eurostat, the statistical office of the European Union.

In December 2014, negative annual rates were observed in sixteen member states. The lowest annual rates were registered in Greece (-2.5%), Bulgaria (-2.0%), Spain (-1.1%) and Cyprus (-1.0%). The highest annual rates were recorded in Romania (1.0%), Austria (0.8%) and Finland (0.6%). Compared with November 2014, annual inflation fell in twenty-six member states, remained stable in Sweden and rose in Estonia.

In December 2014, Malta's inflation rate was at 0.4%. During the same month of the previous year, it was at 0.1%. Its highest rate, over the past 12 months, was during August 2014, when it stood at 0.8%.

The biggest downward impacts on euro area annual inflation came from fuels for transport (-0.53 percentage points), heating oil (-0.17 pp) and telecommunications (-0.08 pp), while restaurants & cafés and rents (+0.11 pp each) and tobacco (+0.07 pp) had the largest upward impacts.